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Carlyle C. Ring, Jr.
Chairman
UCC Article 2B Drafting Committee
Atlantic Research Corporation
5945 Wellington Road
Gainesville, VA 20155-1699
Re: The McManis Motion
Dear Mr. Ring:
When the American Law Institute adopted Professor McManis' motion this past
Spring, we were pleased because it squarely put on the table a criticalissue
which needed to be addressed: the impact of the UCC2B proposals on fair use
and other copyright exceptions in the digital age. Several of us had raised
this issue on previous occasions with Professor Nimmer, but the ALI vote
elevated the issue's visibility and gained it the attention it deserved.
We have read with great interest the many letters sent to NCCUSL in response
to McManis motion, including Professor McManis' letter; we have studied the
proposed Section 2B-104A; and we have met with Professor Nimmer and
representatives of the Information Industry Association. We are now prepared
to offer three observations which we hope will focus the discussion of this
issue at the next meeting of the drafting committee in Minneapolis -- a
meeting which many of us plan to attend.
First, the addition of Section 2B-104A is a significant improvement. As a
formal matter, of course, it has little effect; federal law preempts state
law by operation of the Constitution, and thus a state statute acknowledging
this preemption technically is unnecessary. As a practical matter, however,
the provision has great utility because it will remind state trial court
judges in clear and unambiguous terms that they must consider federal
preemption when applying UCC 2B.
Second, notwithstanding its utility, Section 2B-104A does not alleviate all
our concerns about the possible erosion of the fair use privilege and other
copyright exceptions and limitations. The contours of the preemption of
contract terms by the copyright law are murky, and they have been made even
more so by the Seventh Circuit's recent decision in ProCD v. Zeidenberg. By
focusing on Section 301 preemption while completely ignoring the doctrine of
Constitutional preemption, the decision implicitly calls into question the
viability of the Constitutional preemption doctrine. This problem is
compounded by the plain fact that Article 2B significantly expands the
domain of enforceable contracts. As Professor McManis correctly notes, by
rendering shrink-wrap and click-on licenses enforceable, Article 2B
eliminates an important existing basis for challenging "contracts" which
diminish copyright privileges -- that the purchaser never agreed to the
contract's terms to begin with. Because it eliminates this basis, Article 2B
in its present form could hardly be called "neutral" with respect to its
impact on copyright.
Third, and perhaps most important, the concerns raised about the deleterious
impact the McManis motion would have on the dissemination of financial
information demonstrates a flaw not in the McManis motion, but in the
definition of a mass market license. From Professor McManis' comments, it is
clear that he intended that the limits contained in his motion apply only to
non-negotiated licenses (e.g., shrink-wrap and click-on licenses) for works
distributed to the public. We doubt that Professor McManis wants to inhibit
the licensing of trade secrets, for example, between two commercial
entities. In other words, the McManis motion is aimed at "mass market
licenses" in the common meaning of that phrase. Unfortunately, it seems that
mass market licenses within the meaning of Section 2B-308 include far more.
Professor Nimmer, in his Issues Paper, indicates that some provisions of
Article 2B concern consumers, while others concern a broader mass market.
This distinction recognized by Professor Nimmer suggests an obvious
resolution of this controversy: the principles expressed in the McManis
motion should apply only when the licensees are consumers. Limiting the
McManis motion in this manner would simultaneously prevent the erosion of
fair use and other copyright exceptions while permitting commercial
transactions concerning information to continue undisturbed.
In this connection, we are heartened by the indication in Professor Nimmer's
Discussion Memo for the September 1997 meeting that the issue of the
definition of the mass market license under Section 208 will be on the
agenda. We would urge that this issue be considered in connection with the
issue of "Interface with Federal Law," rather than separately from it. We
look forward to discussing these points in greater detail in Minneapolis.
Very truly yours,
Peter Jaszi
for the Digital Future Coaltion
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